Sunday, July 27, 2014

Austrian School Type Analysis of the Federal Reserve Reaches Forbes Magazine

John Tamny in Forbes takes on the Fed and Fed chair Janet Yellen from a very Austrian school perspective here.

My one small quibble with the commentary is that he calls money a "measure of value." It is a method of exchange and holds value as money because of the willingness of many to accept it in exchange, but it doesn't "measure" anything.

Also of note, Tamny doesn't signal anywhere that his approach to his perspective on the Fed matches up pretty well, but not completely, with the Austrian school, but I can't imagine he wrote the piece without having familiarity with the Austrian school of  economics.

NOTE: For the best discussion of Austrian business cycle theory see Austrian School Business Cycle Theory by the master, Murray Rothbard.



  1. I have a tiny quibble about your quibble. " doesn't measure anything."

    It doesn't measure value, for sure, but it does measure prices, costs, incomes, all various forms of prices. These are objective, for example you get a receipt and you can see precisely what you paid measured in dollars (money). So it does measure prices and does a fine job of that.


    1. "Excuse me sir, but I think your measurements are way off. This BMW is actually $10,000."